Editor’s Note: In this latest account about the challenges faced by SMEs in terms of doing business with the UK Government – a challenge that is more often than not commensurate with King Arthur extracting the sword from the Stone of Scone – Alun Rafique shares, in both words and pictures, his company’s experience with providing evidence before the Communities and Local Government Committee.

For those who weren’t aware, we received a grant from the technology Strategy Board to help develop our tool to assist local councils with adoption of eSourcing and encouraging innovation from local suppliers. We took our innovative design and applied it to the areas of sub-OJEU tenders and in-framework negotiation.

We have had much success in helping councils to easily and efficiently save money. However, we have also faced many challenges working with the Public Sector, mainly relating to the inconsistency of tendering approaches and onerous procedures.

We thought it wise to engage with the Government and submit a paper to the Communities and Local Government Committee investigating local government procurement. From many papers we were chosen to submit oral evidence at a meeting on the 25th of September 2013. We had a unique view as an SME trying to supply Local Government and also as a supplier of systems that they also use for procurement. You can see the written paper we submitted here.

And this is how we took our first foray into politics. It was also our first trip to Westminster Palace. To be honest we felt very honoured to give evidence. It is awe-inspiring to be looking at Westminster and knowing that we had a pass inside, an A4 printout saying “Visitor on Committee business”. We must admit that the feeling of self-importance partially evaporated when we realised that any member of the public can just go in and watch the action. We couldn’t help wonder why so few people did but it was just as well considering the size of the cafe.

The walk to the room where the meeting was being held allowed us to pass through the essence of UK politics. Through the cafe (whilst casually passing Lawrence Dallaglio), into Westminster Hall(almost 1000 years old and a witness of many events from coronation banquets to the trial of Guy Fawkes), through St Stephens Hall (a former debating chamber for the House of Commons) and then deciding to take a well earned rest in the Central Lobby which is the heart of the Palace of Westminster.

It was a great work up to the main event. To imagine three years ago we were just starting out and looking back we seem to have come so far. I guess for many the trip into Westminster is a daily occurrence but it was nice for us to get our foot in the door.

The next stop was the Committee meeting itself. At first we were apprehensive on what to expect. We were asked if we saw the committee with Rupert Murdoch and told it would be quite similar. This brought up memories – would someone throw a foam pieat us? Then we were told probably half the committee members would not be able turn up due to other engagements which put us more at ease. In fact the reality was part way between the two. On the day we had a full house with all the committee members (we would like to think that was down to us!). What surprised us was the professionalism of the organisation and the facilities. You can see from the photos that the layout was as you would see in the news. The room was beautiful with large ornate paintings on the wall, walnut panelling and also someone ensuring that it was all filmed for posterity.

This was the fifth session and it was split into two parts. The first was on delivering social value and the second, our session, was on supporting small and micro businesses. Our fellow panel members were Martin McTague, Chairman, Local Government Policy Unit, Federation of Small Businesses and Dr Pedro Telles, University of Bangor.

Our debate seemed very lively and you can actually watch ithere.The committee covered a good variety of topics and we will summarise the main ones below highlighting our replies which for the most part were echoed by our fellow panelists:

1. Challenges of SMEs competing for local Government business – The views here between the panellists were very similar with respect to local government procurement procedures being varied and inconsistent. We also highlighted that localism for localism’s sake is not enough and local councils need to examine bringing supply chains into the UK from abroad.

2. Issues with collaboration and frameworks – We all highlighted the potential pitfalls in aggregating requirements but eliminating the ability for an SME to tender. There are also too many portals and frameworks out there for the same capabilities which takes up much time and resource.

3. Local Government procurement skillsets – A mixed response here although it seems that good skills exist already and more guidance is required.

4. Would centralising help – Again a mixed view. It would seem beneficial from a leadership perspective but there is a caveat to ensure that the right measurable objectives are put in place.

5. Are the onerous procedures a result of Local authorities or EU regulations – We strongly feel it is a mixture of the LA’s interpretation of OJEU rules for sub-OJEU tenders.

Our overall view is that Local Government procurement need to take a more consistent and less onerous approach. The processes followed should be appropriate to the size of the tenders. Linear and logical scoring mechanisms should be used and Local Authorities should try harder to take account of innovation. Also regional centers of excellence could help with guidance, support, aggregation of requirements and reducing supplier risks as well as helping bring supply chains back to the UK.

We felt very pleased to have had the chance to voice our successes and concerns with Local Government procurement and we hope that our support to this committee will only go to strengthen the conclusions that will come out. It was an enjoyable day and we would like to thank all concerned. We must admit that one of the biggest surprises of the day came at the end when we realised we had already been beaten to the punch on twitter by the Government. They are really getting on top of social media at last.

Wednesday, 4 December 2013

The following article featured as a guest post on the excellent Procurement Insights EU blog. It outlines some of the challenges we have faced whilst working with local government, for which we were invited into Parliament to discuss with MPs - more to come on that later!

Life remains tough for small, innovative companies trying to secure UK public sector business by Alun Rafique

“In order to give Customers using the Framework a balance between
choice of suppliers and best value, following completion of the
evaluation of tenders a maximum number of five suppliers will be awarded
a position on the Framework. It is therefore vital that Tenderers can
offer each of the five modules detailed on the following page. As
referenced previously in this ITT it is anticipated Customers will elect
to procure one or more modules or may choose to purchase a complete
solution incorporating all of the five modules. It is therefore
essential that Tenderers can offer all of the five modules to meet the
requirements of those customers looking for a complete solution. Any
Tenderer who cannot offer one or more of the elements listed above in
3.1 will be removed from this procurement process.”

The above is a quote from an invitation to tender by the UK public
buying organisation (PBO), Eastern Shires Purchasing Organisation.

The modules, which represent a complete e-procurement solution, are
e-tendering, e-evaluation, e-auctions, e-contract management, and
e-vendor management. As stipulated, Tenderers have to offer all
5 modules or face being disqualified as a potential supplier.
Unfortunately, it is this “all or nothing” approach that represents just
one of the many obstacles that Small- Medium Enterprises or SMEs face
in the pursuit of public sector business.

More to the point, the stipulation that Tenderers have to deliver all
5 modules, will eliminate or seriously impede the ability for the
majority of SMEs to participate regardless of the superior capabilities
of the modules they are able to provide. While I believe that this is
an unintended consequence of a short-sighted approach, it nonetheless
amounts to what could only be viewed as a discriminatory practice that
will limit the pool of potential suppliers to the detriment of all
involved – including the government itself.

Despite the government’s attempt to introduce reforms that would
address the above challenge, the task for SMEs remains a difficult one.

In this context, I would like to take a moment to share with you the experience of my company, Market Dojo.

Market Dojo successfully applied for a grant from the Technology
Strategy Board to develop a product to assist public procurement
professionals with e-Sourcing activities.

While this support was greatly appreciated, once fulfilled we were
for all intents and purposes on our own from that point onward. In
essence and despite the government’s recognition that MarketDojo’s
negotiating tool for running e-auctions and electronic request for
quotations warranted financial support as it addressed “a particular
problem area where frameworks have traditionally underperformed,” the
method for actually utilizing our solution is hindered by the above
mentioned all or nothing edict.

Simply put, and has demonstrated by the government grant, we believe
that our product – and the complimentary products of other SMEs – can
collectively save organisations a lot of money.

Even though we have made some progress in the public sector, having
landed three government contracts, the private sector still represents
the company’s best and most reliable opportunity for continued growth
and long-term success. This leads one to wonder why SMEs are worthy of
government funding but not considered to be worthy partners?

There are of course financial consequences associated with this disconnect.

For example, while both the transport team at Bedford Borough Council
and Shropshire County Council have benefited greatly from their
relationship with MarketDojo, Worcester County Council’s adoption of a
more traditional contracting strategy meant that they ended up paying
£2750 per e-auction, instead of the £500 for five that Market Dojo would
have provided. This difference amounts to Worcester paying 27 times
the price that neighbouring Shropshire County Council is paying per
e-auction.

A further complication in terms of government achieving a best value
outcome is the tendency on the part of local councils to interpret
European Union tendering regulations differently from one another. Some interpretations as I have discovered, can lead to councils paying
far too much for a less effective solution as a result of inflexible
scoring mechanisms for evaluating tenders. In one instance it was
suggested that if we redesigned our system to better mirror the
specifications of the tender, we would have a better opportunity of
winning the contract. Unfortunately, such an alteration would in
reality eliminate the very functionality that led to the significant
savings that were realized by both Bedford and Shropshire Councils.
This again makes one wonder what it is that the government is attempting
to accomplish, as there seems to be a greater emphasis placed upon
following arbitrary regulations as opposed to driving greater value from
procurement.

Needless to say, the combined outcome of all that I have covered
above has led to a common complaint that far too many public sector
procurement people hide behind rigid processes and procedures. This in
my estimation, prevents public sector bodies from realizing maximum
value for money in that they ultimately discriminate against SMEs and
the innovative solutions they can provide.

Monday, 4 November 2013

This is part 3 of Nick Drewe’s foray into a domestic eSourcing exercise for his house extension. Nick has now held all the site visits and chased in the quotes. Time for a spot of bid analysis to prepare for the contract award. You can catch up on part 1here and part 2 here.

Apologies for the delay in compiling part 3 of this eSourcing project. Amazingly over a month has passed since my last update, and what a hectic month it has been. I had scheduled in site visits with 20 builders over the period. 3 of the builders did not turn up, which presented itself as an easy method of establishing their reliability, or lack thereof, as it happened!

The remaining 17 appointments were conducted smoothly. I gave an extra bonus point to those who came with the drawings and specifications in hand: always good to prepare for a meeting to make best use of the available time. I couldn't resist the opportunity to ask them about their experience of using the Market Dojo eSourcing tool, which was thankfully overwhelmingly positive, despite a few of the guys needing to ask their siblings/cousin/mate if they could use their computer to access the internet!

Anyhow,
the quotes steadily trickled in. Some declined to quote due time
constraints or an unrealistic budget (we’ll see about that minute),
whilst some provided an entire bill of materials and profit and loss
account! The detail was astounding, literally right down to the last
screw.

Despite this professionalism, the difficulty I faced with this as a layman was that I was lost in the detail. I couldn’t see the wood for the trees. I almost preferred the quote that said “This quote includes everything in the spec, except we need you to buy the kitchen and sanitaryware.”

I mentioned there were a few objections to the budget, which for the record was circa £70,000 ex. VAT. After a fairly thorough market analysis I believe I have my defense on that, as here is the complete set of quotes I received:

There are a number of great things to witness here.

Savings! (in inverted commas)

I could have chosen to proceed with one of the two initial offers on the table from the architect, which I’ve termed the ‘incumbent’ bids. Perhaps I could even have negotiated 10% off through a classic face-to-face discussion. However I would not have been able to afford them in their entirety, so I would have had to make detrimental changes to the spec. by going back to the business and consulting with the key stakeholder, a.k.a. my wife!

However, with a 33% saving against the best ‘incumbent’ bid, on a like-with-like spec, we are now in a great position to secure the build that we want. As 33% equates to some £35,000, I can say without question that this exercise has been worth my time. Furthermore whichever outfit I do go with has such a good knowledge of what I’m looking for now that they can hit the ground running.

Finding market price

There is a clear trend towards the market price, almost like a flattened S-curve from the best bid to the worst. This gives me several affordable options, options I shall gladly exploit in part 4 of this exercise when I make my award of contract.

Engaging market forces

The two bids I received via my architect prior to embarking upon this sourcing project are undeniably the least competitive. I could argue this is because I ran my sourcing project on a professional level, creating an impersonal barrier between me and the market via the eSourcing tool, which in turn gives the builders the impression that I am not doing a half-hearted effort. Consequently this can encourage more competitive offers. Sadly neither of the previous ‘incumbents’ took the opportunity to quote again, so I can’t be certain.

It does illustrate that if you approach just a handful of suppliers in a liquid market, you have no assurances whether you have unintentionally approached the two towards the right of my graph or towards the left. As with any statistical analysis, you need to increase your sample size to increase your certainty. I feel that by approaching 90-odd builders, I have sufficiently achieved this. I could have invited or proactively chased more but I would then be at a greater risk of diminishing returns.

Either way, I don’t think practically that I could have achieved this without using the eSourcing tool. Furthermore it proves that you can achieve excellent ‘savings’ from a robust quotation process without the need to go to an eAuction. In this case an eAuction is not on the cards given that I’ll likely revise the spec to compromise on areas of low importance (the sun-tube seemed like a good idea at the time but a light-bulb would be £700 cheaper!) in order to maximise investment in the focal areas, e.g. the kitchen, now that we have our itemised costings.

Stay tuned for part 4 where I make the all-important assessment of both the price and non-price elements of the bids to reach the award decision.

Tuesday, 22 October 2013

For those with eagle eyes, you may have noticed a new feature in our eAuctions over the weekend and this is one we are very excited about.

First a bit of background. Almost all eAuction software today is driven by ‘pull’ technology, which basically means that all bid updates etc. are sent to the users when they ask for it, either by manually refreshing the screen or by the software causing an automatic check every 5 to 10 seconds (sometimes longer). Initially this is what we did with our software, as the technology around us when we started in 2010 was still developing. Put into context, the majority of our competitors are based on technology from the late 1990’s.

However, in 2011 standards were brought in for a technology called ‘websockets’. Websockets ‘push’ updates to the users instantaneously. One of the well regarded tools for doing this is Node.js, which is used by GroupOn, Microsoft, LinkedIn, Dow Jones and many others. Well, now they can add Market Dojo to that list!So, what does this mean to our users? Truly real-time updatesOur journey with Node.js started a few months ago to make our graphs update live. However, now you will notice that all our eAuction updates are instant, thereby creating more dynamism and encouraging even more active participation. During our testing, we’ve even seen the case that you can send a message to someone during an auction and they receive it before you’ve even see a ‘message sent’ confirmation on your own screen. Now that’s what we call real-time!We recognise that there are users out there who are perhaps restricted to older browsers or hardware. For this reason, we have built in a fail-over to our old update mechanism in the event that the real-time updates do not work for certain individuals. Live Auction FeedMore importantly, it has enabled us to develop an even more innovative feature - the Live Auction Feed. It could be compared to the text commentary you see flashing across the screen on CNN to let you catch up on all the headlines whilst witnessing the breaking news.

The Live Auction Feed is updated instantly with new bids, including who placed them, what value and what position the bidder is now in (or whether they are still bidding in the case of a Japanese Auction), as well as both sent and received messages and any changes to the Settings made during the eAuction. You can scroll through this history at any time, which pauses the feed to give you time to read it.In summary, never again will you be able to say ‘Oh, something’s changed, I missed that’, as you’ll have a permanent script of the complete auction.We hope you enjoy these new features, which have been brought to you by a collaborative development with a client of ours. Of course if you have your own requests, let us know and we will be delighted to work with you. And congratulations to Salve on being the first to try out the new feature for real!

PS: Here are a couple of videos of the new real-time update and Live Auction Feed features in action:

Tuesday, 15 October 2013

Last week we attended the CIPS Annual Conference 2013 as quite possibly the latest entrants ever! By chance at the September ‘13 eWorld event, we met Johnnie Norton, a Sales Exec for Supply Management and Ravjeet Kang, a Sales Manager for Redactive Media Group. Johnnie mentioned the sponsorship opportunities for the CIPS event, located within the excellent facilities of Kings Place, London, taking place in just two weeks time. Being an agile company we jumped at the chance after a spot of negotiating - we are procurement professionals after all!

What makes the CIPS conference unique compared to other conferences that we have sponsored is that the delegates have to pay not inconsiderable sums of money to attend. To incentivise the delegates to part with their cash, the quality of the speakers and of the event as a whole has to be uncompromising, and so it proved on the day. Some delegates we spoke to travelled as far as Nigeria and Ghana simply to attend, so to say they had a vested interest in the event would be an understatement.

There were approximately 300 delegates and 11 sponsors, equalling eWorld for footfall but with far fewer sponsors, which was great for us. The sponsors covered a much broader range of goods and services, from American Express Corporate Payments, whom we also met at eWorld, through to procurement outsourcing and HR services. The sponsors were all held in the main break-out room, which made it hard for us to be missed, although you feel apologetic for pouncing on someone ensnared in the queue for refreshments!

Initially we doubted whether there would be delegates interested in our relatively niche software tools for eSourcing, supplier innovation or category assessment. However, as delegates had paid to attend, they made sure they returned to their office with some new ideas. As a result our latest products, Innovation Dojo and Category Dojo, garnered a lot of interest given their uniqueness in the marketplace. In fact, we received no fewer than two shout-outs during the presentations, one from Paula Gildert, the CIPS President, for our slightly unusual branding, and one from Tim Carrier, Product Development Director for Capita, for Innovation Dojo, as he has done a series of work on encouraging innovation from your supply chain. Did you know for example that the Heinz squeezy bottle was an innovation from one of their suppliers? Consider what great ideas your suppliers may have in store for you right now.

Another characteristic of this event, again tied to the delegate fee, was the profile of the delegates. In previous exhibitions we had been used to engaging in discussions with those of less seniority, which is always beneficial to learn the pains and what we can do to help from the ground up. However, here we were exposed to many more CFOs, CPOs, Supply Chain Directors and particularly those with global category management remits. It’s all too early to say what may come from these interesting discussions, but you can’t fault the introductions that were made or the promotion of our brand to the right people.

In summary, this was an excellent event for both delegates and sponsors, and held in a great venue with staff so efficient they literally took your finished plate of lunch from your hand! We relish the chance to brush up our negotiating skills once more to attend next year and we hope to see you there!

Friday, 11 October 2013

We were very proud to be invited to the Salon Solutions event in Paris on the 1st-3rd October by our French partner, Effixens. As the only French speaker on the Market Dojo team, it was up to me to brave the elements and the French cooking.

The trip over to Paris, although an early, start was actually cheaper than a day return from London to Bristol. Admittedly I booked early but certainly something to reflect upon. The Paris Metro system was my next challenge. Not too dissimilar from the London Underground except it does have 2 special tracks which go North to South and East to West called the ‘RER A’ and ‘RER B’. Not a big difference except if anyone in the Paris transport system is reading this, please put up some signs to tell people you need a different ticket!

The conference itself was being held in the CNIT conference building (The Center of New Industries and Technologies), located in Puteaux, France, and was one of the first buildings built in La Défense. This is the up-and-coming business area of Paris on the West side. It has a truly magnificent plaza which I think I aptly captured in the panorama photo below.

Incidentally, for those of you who are mathematically inclined, the Grand Arch is 3D projection of a tesseract undergoing a simple rotation in four dimensional space...who’d have thought it.

Our partner Effixens first met us at eWorld in London and have ever since been helping to promote us over the channel. They were kind enough to share their stand along with a couple of their other partners: MLR, a consultancy, and Shortways who help put help content into SAP. Effixens themselves have many years experience with purchasing systems and are also a close partner of SAP.

I think you can see from the picture below we brought a ‘Je ne sais pas quoi?’ to the stand:

It was a very interesting event with the thrust being anything relevant to ERP and business systems, from large companies such as Microsoft and Oracle to smaller P2P vendors like B-Pack over to contract management and CRM.

eWorld gives us the opportunity to speak easily with people very much interested in what we provide and often a ‘hello’ is enough to engage, whereas in France with such a large conference and with a rusty French dialect, it was never the easiest to find the interested parties.

However which some typical English bravado and a ‘êtes-vous intéressé à eSourcing?’ we soon captured quite a few leads. Would I say there was a big difference between a French show and one from the UK? Not especially. I found the French show slightly more relaxed (it was 3 days) and the lunches slightly longer (many thanks to our other French Partner on contract management, Per Angusta for my first steak this trip!) but I presume anyone would have guessed that!

My biggest surprise came on the third day as B-Pack, who had chosen to take part in a panel conference on eAuctions, requested my help. For those that don't know this, like many of the speaking slots, it involved a journalist asking questions from the panel members and also giving the audience a go. I must say that even though I started out looking like a timid rabbit caught in the full glare of a car’s headbeams, I would like to think they warmed to my Franglais!

For my final night I was lucky enough to be entertained by my hosts at a restaurant called the Louchebem. Now, like the English with their cockney rhyming slang, the French also have a few oddities. In the olden days, to prevent the tax man catching on to what was being sold in the market they developed another language entirely. As an example a ‘Boucher’ (butcher) with the ‘B’ replaced with an ‘L’ and a ‘Bem’ put on the end becomes ‘Louchebem’. Clear as mud? Slightly more confusing than Verlan where a ‘Femme’ becomes a ‘Meuf’!

Anyhow, what can I say but an enjoyable few days out the office, met some great people and of course celebrated the end of the conference with a bottle of bubbly!

Tuesday, 8 October 2013

The Market Dojo engineering team have been busy again. This time cranking out some features requested by our favourite people - our customers.

We love to hear what our customers think, as they often bring a new perspective and always have suggestions based on their real world use of Market Dojo.

So from today...

1. Event hosts will be able to attach several documents to a single message.
This will make it easier to communicate messages which relate to several documents (for example to remind participants to sign NDA’s).

A message including two documents

2. It will be even clearer when a Participant needs to be accepted to an Event.
We will use a 'notification' (a red circle with a number in it) on the Participants tab to show how many participants are awaiting acceptance. This will ensure that Hosts can quickly give access to their Participants, whilst maintaining a rigorous approval process.

A notification that one action is required on the participants tab

3. The list of participants will load faster.
For Events with a very large number of participants, the detailed list of information about them should load more quickly. This should really help out our expert users who invite 600+ participants to their events!

Tuesday, 1 October 2013

Last week saw our now regular outing to the eWorld Purchasing & Supply event in London.

The team in front of our booth

My day at eWorld began with a train journey to London Waterloo and a pleasant walk across Westminster Bridge, past Big Ben and the Houses of Parliament, to the Queen Elizabeth Conference Centre. When I arrived, the venue was a hive of activity as exhibitors unpacked their equipment and prepared for the day ahead. I found my colleagues in our familiar location, at the foot of the stairs to the seminar room. They had already done most of the setup of our stand and I was just able to help add a few final touches. Very soon it was time to greet the first delegates of the day.

The day flew past as we spoke to delegates about Market Dojo, and also got some interesting new ideas based on their priorities and suggestions.

For me, what was particularly striking about this eWorld was how many Market Dojo customers were present. A really nice reminder of how we are growing. It was a great chance to put a face to a few familiar names and also discuss how they were getting on. It was also really exciting to see the positive reaction we got for the new things which we have been working on.

Before I knew it, the highly efficient catering team were circulating with drinks indicating that the event was almost over. Of course, we squeezed every last minute out of our day, even doing a demonstration as the event staff began dismantled the booths around us.

After a quick review, it was time to say goodbye to my colleagues, and head back to Waterloo.

Many thanks to Claire Boffey and her team at Revolution for organising a great event. Thanks also to everyone who took the time to stop and talk to us at eWorld.

Friday, 27 September 2013

This is part 2 of Nick Drewe’s foray into a domestic eSourcing exercise for his house extension. Nick’s tender has now gone live! You can catch up on part 1 here.

So last Friday evening I hit the button and made my event live. Invitations were sent out to 83 builders in total, although since then I’ve added a further 9 based on recommendations and referrals. I also forgot to include the builders who provided the original quotes, which wasn’t very fair of me, so I’ve rectified that and included them, should they wish to revise their offer.

I must admit, there were mixed feelings of excitement and apprehension about hitting that button. By the time the screen refreshed, 83 builders around Bristol received the invitation from me (we use an email alias on Market Dojo to make the emails come from the user and not from a generic no-reply@ address to ensure any replies make their way back to me). They would also know where I live! However, this is a genuine opportunity, and I am giving everyone an equal chance of winning the business, so I’ve no concerns. I was more intrigued about what would happen next.

In my previous post I stated that I should start ringing round those who were invited in order to maximise participation. Well, another confession here, we were exhibiting at eWorld on Tuesday and so this week I’ve been absolutely swamped and not made a single outbound phone call to them. Thankfully the builders have been much more proactive than me, and even over the course of that very first evening on the Friday, I received 7 registrations, 2 of which proceeded to download the tender documents. I even had my first site visit on the Sunday, all arranged through the Message facility in the software.

I was also informed that three of the participants I invited to the tender had invalid emails, which meant that the software picked up the delivery fail message and flagged it against the participant in question, be it for a full mailbox, unrecognised email address or some other reason. It gave me the chance to find an alternative address for them or, consequently, discover they were no longer in business.

I made the most of my journey back to Bristol from eWorld by using the software on my smartphone, where I sent out some reminders to various categories of participants, i.e.:

Those who hadn’t responded at all, to which I sent reassurances about the validity of the process, since builders do get a LOT of spam.

Those who had registered but not accepted the invitation, to which I sent a reminder on what to do.

And those who had accepted the invite but had not downloaded the documents, to which I also gave some further motivation.

So let me fast forward to where I am as of today, exactly a week after publishing the tender:

I have 92 builders on my list. 84 are still approved to take part, as 5 builders had no capacity until well into 2014, and 3 were no longer in business. Of those 84, 20 are registered and 16 have accepted the invitation. Interestingly 4 of them registered using the Invite Code, which is a unique key that lets people who were not on my original list apply to take part, be it by word of mouth or referral or whatever. I approved their access to my tender having looked through their websites.

14 have downloaded the drawings and I have no fewer than 9 site visits planned over the next few days - there goes my chance of writing thank you letters for our recently received wedding gifts!

I’ve also made an edit to my questionnaire since go-live, as I omitted a rather crucial question of asking whether the builders are VAT-registered. It would be rather hard for me to compare the quotes without this knowledge.

I’ve also had to think about my Lot structure, using market-informed sourcing if you will, in that some builders are experts in loft conversions but not extensions and vice-versa. Therefore I might even be looking to award separately, although again there is feedback that awarding the total job to one outfit has cost advantages. My Lot structure allows for this expression of capability, and so I shall await the market feedback before considering my award position.

Feedback so far has been overwhelmingly positive. This approach has helped the builders to have structure and a central place to refer to. Given that IT is not integral to their day job and that in some cases they don’t even have their own computer, it was always going to be a hurdle, especially as I have no time to hand-hold people through the process and nor do they have time to sit at a computer for long periods. But we did design the software on an entirely self-service model and so far, so good.

Stay tuned for part 3 when my hectic weekend of site visits will be concluded and we might even have some competitive quotes in. Fingers crossed!

Friday, 20 September 2013

This is a multi-part article from Market Dojo co-founder, Nick Drewe, who is currently planning a house extension and is embarking on the sourcing phase of the project. We’ll let Nick introduce in more detail below…..

I recently got married and had a fantastic honeymoon in Turkey, co-incidentally the first time I’ve had more than a week off work in well over 3 years! Now I’m back, our next task as a married couple is to build a major house extension.

Up until now we’ve had the plans drawn up by the architect, giving us an indicative budget of £70,000. We’ve had all planning and building regulations approved and we’re in the midst of adhering to the Party Wall Act (not fun - but that’s for another time). Our architect, Ben, is helping us manage the whole project, given his experience and the fact he lives 10 doors up the road from us!

Ben drew up a very comprehensive tender package, including all drawings, national standards, specifications, and a detailed list of the scope of works, and has approached four contractors that he has worked with in the past. Two of those contractors haven’t even bothered quoting for the job. The other two came in with quotes of £93,000 and £98,000, both excluding VAT. The quotes have been paper-based and are barely comparable, with wildly different items included within their cost breakdown. Therefore, not only are they greatly over budget, but I have no confidence that they even fulfill the requirement.

And so I’ve decided to take things into my own hands. I shall distribute the tender package (all 20 megabytes of it) to the Bristol building trade as a whole to find out a) what the real market price is for my extension works and b) to make sure they quote and deliver exactly what we’ve asked for.

I’m in the privileged position of having unlimited access to the professional Market Dojo eSourcing tool, designed for exactly this purpose. Over the years we’ve witnessed our clients, including housing associations who are tendering building services like this, save millions. Some clients run tenders worth just a few hundred pounds. In fact I recall Hamworthy Combustion, our first client, saving £5,000 on a £25,000 contract by using our application. Why on Earth should I not use this approach? Well, exactly.

So this is where I’ve got to so far. I’ve created a test event on Market Dojo so I can interact with it as a test builder and I’ve invited my brother, who is a project manager in the building trade but is unfortunately based the other side of the country, to do likewise. This will help us validate the structure and communication of the tender. I’ve added my ‘Brief’, which gets included in the initial invitation email to the builders, so they will have a heads up on what I’m looking to do and how they can proceed. I’ve added an online questionnaire for the builders to answer my specific questions such as providing references, adherence to standards, confirmation that their price is all-inclusive, etc. I’ve decided to score the questionnaire so I can rank the builders based their answers.

I’ve created a robust Lot structure that pairs up with the breakdown of jobs in the Scope of Works, ensuring all quotes that come in are like-for-like and against our requirements. I’ve uploaded the 20MB of tender documentation so I can track when they download it, but I’ve made sure that the Scope of Works is included with the invitation email to give reassurances to the builders that this is a genuine job. I’ve also added my architect as a collaborator on my tender so he can dip in and out to check how things are going and can help me to answer the questions. I’ve even added my wife as a viewer in case she has the inclination to have a look at what we’re up to!

My final task is to pull together the list of builders, i.e. the sourcing exercise. All I need for Market Dojo is a list of email addresses. Typically if the tender is being run manually and paper-based, I would be inclined to invite only 3 or 4 builders, since the efforts of burning CDs and posting them out, checking they’ve arrived, having dozens of phones calls to handle the questions which are repeated from one builder to the next, collecting all the paperwork and somehow collating it together despite the incomparable nature of the bids, is all very laborious. However, since I’m running this online, there is very little extra effort whether I invite a few builders or a few hundred. Therefore at this point I shall be casting my net far and wide and see how it funnels down.

My first point of call is Google. Searching for ‘builders in bristol’ and other related terms like ‘house extension bristol’, I’m able to find lots of candidates. I’ll be asking for references as part of the questionnaire, so at this stage all I need to know is if they look professional, if they mention jobs that look similar, if they are reasonably local, and if they have an email address. I encountered websites like mybuilder.com a lot, so clearly I am not the first to think of running an online tender process for personal building works, although those sites don’t have the facility to properly manage your tender or to invite builders from outside their system, or even to run a reverse auction to settle the negotiaton if I so please. Additionally builders have to pay fees, which is not a model I believe in as it reduces competition and the fees would end up being passed on to me anyhow.

I will also ask friends and family for referrals, and scour professional associations for any recommendations as well. At this stage, the more the merrier.

So as of today, I have pretty much built my tender and found my list of prospective builders. My action over the weekend is to hit the button and make it live. At that point I really should start ringing round the builders to let them know I’ve been in contact and that I am a genuine prospect. That way I’ll increase my chances of receiving the competitive offers and finding that proverbial ‘needle in a haystack’ builder that precisely meets my objectives.

Stay tuned for part 2 as I manage the tender and hopefully get some competitive offers!